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 NATIONAL
SENIOR CERTIFICATE

GRADE 12

ACCOUNTING

FEBRUARY/MARCH 2015

MEMORANDUM

MARKS: 300

MARKING PRINCIPLES:
1. Penalties for foreign items are applied only if the candidate is not losing marks elsewhere in the
question for that item (no penalty for misplaced item). No double penalty applied.
2. Full marks for correct answer. If answer incorrect, mark the workings provided.
3. If a pre-adjustment figure is shown as a final figure, allocate the part-mark for the working for that
figure (not the method mark for the answer).
4. Unless otherwise indicated, the positive or negative effect of any figure must be considered to award
the mark. If no + or – sign or bracket is provided, assume that the figure is positive.
5. Where indicated, part-marks may be awarded to differentiate between differing qualities of answers
from candidates.
6. This memorandum is not for public distribution, as certain items might imply incorrect treatment. The
adjustments made are due to nuances in certain questions.
7. Where penalties are applied, the marks for that section of the question cannot be a final negative.
8. Where method marks are awarded for operation, the marker must inspect the reasonableness of the
answer before awarding the mark.
9. In awarding method marks, ensure that candidates do not get full marks for any item that is incorrect
at least in part.
10. Codes: f = foreign item; p = placement/presentation.

This memorandum consists of 17 pages.

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Accounting 2 DBE/Feb.–Mar. 2015
NSC – Memorandum

QUESTION 1
1.1 CONCEPTS

1.1.1 Bank overdraft 

1.1.2 Dishonoured cheque 
1.1.3 Debit order 
1.1.4 Stale cheque 
4

1.2 BANK RECONCILIATION

1.2.1 Explain how this loss of R24 000 would be treated in the books.
Any ONE valid response 
Expected responses:
• Enter in CPJ and describe as loss due to theft.
• Apply rule of prudence to reduce Bank and to record a loss.

Explain how Roy can prevent a loss of this nature in the future.
Provide TWO points.

Any TWO valid responses  

Expected responses:
• Insist that all cash collected is deposited into the Bank daily.
• Division of duties where one person collects cash and
another deposits the cash.
• Check documentation on a daily basis; receipts must equal
deposits. 4

1.2.2 Calculate the correct bank account balance on 31 October 2014.

16 160  – 2 710  – 1 650  + 450  - 24 000 
= overdraft of 11 750  one part correct 6

1.2.3 Give a suitable reason for the entry from the Bank
Reconciliation Statement of the amount incorrectly debited,
R2 500.
Any suitable reason 
Possible reasons:
• The bank had in error shown a cheque of another client in the
current banking account of the business.
• The bank duplicated an entry (example bank charges, debit
order) on the debit side of the bank statement. 2

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Accounting 3 DBE/Feb.–Mar. 2015
NSC – Memorandum

1.2.4 The office assistant of Manto Traders takes money from the cash
register to make payments for business expenses.
Explain why this is bad accounting practice.

Any valid explanation 

Expected responses:
• All cash must be deposited intact to ensure that internal control
is not compromised.
• This will lead to abuse and the possibility of fraud because
there will be no authorisation or documentation.

Provide ONE point of advice to Roy.

Any ONE valid point 

Expected responses:
• Stop this practice immediately and use the petty-cash system
for daily expenses. 4

1.3 CREDITORS' RECONCILIATION

1.3.1 CREDITORS' LEDGER OF NKOMAZI TRADERS

MALELANE SUPPLIERS (CL7)
Balance per Ledger Account 47 064
Error corrected on Invoice 346 – 1 512
Adjustment of discount on C207 1000
Correction of error on Invoice 135 6 929
Interest 29
one part correct  39 652 8

1.3.2 CREDITOR'S RECONCILIATION STATEMENT ON

30 SEPTEMBER 2014
Balance as per Creditor's Statement 40 271
Credit note incorrectly recorded (816 x 2) (1 632) 
Discount not yet recorded (2 532) 
Trade discount omitted (981) 
Invoice issued after statement date 4 526 
Balance as per Creditors Ledger one part correct 39 652  7

TOTAL
MARKS

35

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Accounting 4 DBE/Feb.–Mar. 2015
NSC – Memorandum

QUESTION 2

2.1 Calculate the value of the closing stock of 145 television sets on
28 February 2015 using the FIFO method.

  
R411 750 + (55 x R4 875)
= R679 875  one part correct
7

2.2 Calculate the cost of sales.

R385 000 + R1 765 500 – R14 625 – R679 875 = R1 456 000
    
see 2.1.1 one part correct
6
Calculate the average mark-up % achieved for the year.

R847 800 ÷ R1 456 000 x 100 = 58,2%

  see above  one part correct
4

2.3 Provide a calculation to prove whether the information given by the

cleaner is true or not.

   
70 + 360 – 3 – 276 = 151
On hand = 145 
Missing = 6 6

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Accounting 5 DBE/Feb.–Mar. 2015
NSC – Memorandum

2.4 Jane is concerned that the final stock of 145 television sets is not
appropriate for her business. Provide a calculation or figures to
support her opinion and explain.

Calculation/Figures:

Any valid figures: 

145 x 365 = 192 days

276 1
OR
679 875 x 365 = 170 days
1 456 000 1
OR
Compare stock on hand (145 units) to total sales (276 units)

Explanation: 

• Not appropriate as stock will last at least 6 months 4

2.5 Comment on whether or not Jane's strategy of adjusting the selling

prices has benefitted the business. Provide figures to support your
answer.

Excellent answer = 4 marks; Good = 3; Average = 2; Poor = 1; Incorrect = 0

Expected response: 

The strategy was successful in December but Jane then increased the
selling price significantly in January. She has not reduced the selling prices
when cost prices decreased. Her competitors will probably decrease prices
when possible to increase their market share. 4

2.6 Provide TWO points to assist Jane in improving internal control in her
business.

Any TWO points  

Possible responses:
• Regular stock counts to check that no stock goes missing.
• Division of duties to check that all sales are recorded properly and
that stock purchased is properly secured.
• Reconsider pricing policy to reduce stock to acceptable levels. 4

TOTAL
MARKS

35

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 Accounting 6 DBE/Feb.–Mar. 2015
NSC – Memorandum

QUESTION 3

3.1 Choose a description from COLUMN B that matches a term/concept

in COLUMN A. Write only the letter (A–E) next to the question number
(3.1.1–3.1.5).
3.1.1 B 
3.1.2 E 
3.1.3 A 
3.1.4 C 
3.1.5 D  5

3.2.1 ORDINARY SHARE CAPITAL

850 000  ordinary shares in issue at beginning of
5 737 500 
year
150 000 shares repurchased during the year
(1 012 500) 
(150 000  x R6,75 )
700 000  ordinary shares in issue at end of year 4 725 000 
operation, one part correct 7

RETAINED INCOME
Balance on 1 July 2013 181 900 
Net profit after income tax 813 600 
Shares repurchased (150 000  x 0,65 ) (97 500) 
Ordinary share dividends operation, one part correct (595 000) 
Interim (paid) 315 000 
Final (recommended) (700 000 x 40 cents) 280 000 
Balance on 30 June 2014 operation, one part correct 303 000  10

TRADE AND OTHER RECEIVABLES

Net trade debtors (118 370  – 6 100  + 11 700  123 970 
28
SARS: Income tax (320 900  – 316 400) (813 600 x / 72 ) 4 500 
Prepaid expenses 12 430 
TOTAL operation, one part correct 140 900  10

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 Accounting 7 DBE/Feb.–Mar. 2015
NSC – Memorandum

3.2.2 BARGAIN TRADERS LTD

BALANCE SHEET ON 30 JUNE 2014

ASSETS
NON-CURRENT ASSETS operation 4 985 600 
Fixed/Tangible Assets balancing figure 4 865 600 
Fixed deposit 3 120 000 

CURRENT ASSETS 890 300 

Inventory (355 700 + 9 500 ) 365 200 
Trade and other receivables see 3.2 140 900 
Cash and cash equivalents (351 200 + 33 000 ) 384 200 

TOTAL ASSETS see Total Equity and Liabilities 9 5 875 900 

EQUITY AND LIABILITIES

SHAREHOLDERS' EQUITY operation 5 028 000 

Ordinary share capital see 3.2 4 725 000 
Retained income see 3.2 3 303 000 

NON-CURRENT LIABILITIES 227 800

Loan: Drake Bank 5 227 800

(295 000  + 31 200  – 98 400 ) one part correct

CURRENT LIABILITIES operation 620 100 

Trade and other payables 241 700 
(197 000  + 11 700  + 33 000 )
Shareholders for dividends see 3.2 280 000 
Current portion of loan 98 400 

TOTAL EQUITY AND LIABILITIES operation 8 5 875 900  28

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Accounting 8 DBE/Feb.–Mar. 2015
NSC – Memorandum

3.2.3 Calculate the net asset value (NAV) on 30 June 2014.

5 028 000 ÷ 700 000  = 718,3 cents  operation one part correct 3

3.2.4 Comment on the price offered for the shares that were
repurchased. Quote relevant financial indicators (actual
figures/ratios/ percentages) to support your comment.

Good answer with figures = 3; Satisfactory = 2; Weak = 1; Incorrect = 0 

Shares were repurchased for R7,40 each.

The NAV on 30 June 2014 was 718 cents (696 cents in 2013).
An upward trend
The market price at the time was R9,25. Indication that investors are
interested in the company.
The price offered was conservative. The company benefitted from this
transaction. (But shareholders who left might not be satisfied.) 3

3.2.5 Calculate Kyle Mason's percentage shareholding after the

proposed share buy-back on 31 August 2014.

315 000  x 100 = 51,6%  one part correct

610 000  1
(700 000 – 90 000) 3

As another shareholder, discuss your concern regarding the

proposed repurchase of shares. Give TWO questions you would
ask the directors at the annual general meeting.
Concern: 
Any comment explaining the shift to major shareholder
Kyle Mason will own more than 50% of the company. (He has
deliberately influences this.)
He can entrench himself as CEO for a longer period. The %
shareholding has had a major effect on control.
Questions: (Any TWO)  
• Were the other directors aware of the strategy of Mason?
• Why is it necessary to reduce the capital of the company?
• The company is shrinking, is this intentional?
• Why do this so soon after an earlier reduction in capital?
• At what price will these shares be bought back?
• How will this affect liquidity (current ratio is relatively low)? 6

TOTAL
MARKS

75

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Accounting 9 DBE/Feb.–Mar. 2015
NSC – Memorandum

QUESTION 4

4.1 What is the main purpose of a Cash Flow Statement?

Good answer = 2; Average = 1; Incorrect = 0 
It provides users of financial statements with information on the inflow and outflow
of the cash resources of the company
To see how monies were generated or spent and what the cash flow position is.
To account for the difference in opening and closing bank balances 2

4.2 Calculate the missing amounts (indicated by a, b, c and d) in the

Fixed/Tangible Asset Note for the year ended 31 October 2014.

Workings Amount
a 3 000 000 – 2 500 000 500 000 
b 660 000 x 20% 132 000 
c 660 000 – (b) – 446 000 82 000   one part correct
OR 150 000 – 68 000
d 157 500 + 48 000 -55 000 150 000 
OR 258 000 – 108 000 9

4.3 CLASSICO LTD

CASH FLOW STATEMENT FOR THE YEAR ENDED 31 OCTOBER 2014
NOTE: Ticks in final column are for operation AND correct use of brackets/no brackets.

CASH FLOW FROM OPERATING ACTIVITIES 625 000 

one part correct
Cash generated from operations 1 985 500
Interest paid (175 500)
Taxation paid (27 500 + 375 000 + 22 500) ( 425 000) 
one part correct
Dividends paid (385 000 + 825 000 – 450 000) ( 760 000) 
one part correct
9
CASH FLOW FROM INVESTING ACTIVITIES 534 000 
one part correct
Fixed assets purchased (48 000) 
Proceeds from sale of fixed assets
582 000 
(500 000 + 82 000 see4.1.2 c) one part correct
5
CASH FLOW FROM FINANCING ACTIVITIES 925 000 
one part correct
Proceeds from the sale of shares 300 000 
Change in loan (2 000 000  - 1 375 000 ) 625 000 
one part correct
6
NET CHANGE IN CASH AND CASH EQUIVALENTS 2 084 000 
check operation 
CASH AND CASH EQUIVALENTS AT BEGINNING 207 500 
CASH AND CASH EQUIVALENTS AT END 4 2 291 500  24

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Accounting 10 DBE/Feb.–Mar. 2015
NSC – Memorandum

4.4
Decisions by Reason to support Reason to support
directors John's opinion directors' decision
(other than improving
cash flow)
Dilutes the returns to Cheaper option of raising
Issued more
existing shareholders  funds as loans carry
shares
interest 
Prevents the company Unproductive or unused
Sold fixed from benefiting through assets will incur
assets capital gains  maintenance expenses.

8

4.5 Calculate the acid-test ratio.

(1 075 000+ 2 291 500 ) : 1 450 000 
3 366 500

= 2,3 : 1  or 2,32 : 1 one part correct 4

Calculate the earnings per share.

975 000  100c
x
750 000 

= 130 cents  one part correct 3

Calculate the return on average shareholders' equity.

975 000 100
x
½ (4 450 000 + 4 000 000) 1
4 225 000

= 23,1%  or 23,08% or 23,07% or 23% one part correct

5

Calculate the debt-equity ratio.

2 000 000 : 4 450 000

= 0,4 : 1 (or 0,5:1) one part correct

3

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Accounting 11 DBE/Feb.–Mar. 2015
NSC – Memorandum

4.6 The directors proposed to expand the business operations in the new
financial year. One of the directors suggested that they finance the
expansions by taking a loan of R1 000 000, instead of issuing new
shares to the public. Quote and explain TWO financial indicators to
support his opinion.
Financial indicator  
Trend  
Explanation  

Debt/Equity ratio
• It has increased from 0,34: 1 to 0,45:1.
• Company still has a low financial risk.

Return on average capital employed

• It has increased from 18% to 26%
• Company is positively geared as it exceeds the rate of borrowing
which currently is 12%. 6

4.7
4.7.1 Calculate the amount of dividends Bongani would earn for the
financial year ending 31 October 2014.

32 000  x 110 cents  = R35 200  one part correct

(R1,10)
3

4.7.2 Should Bongani be satisfied with the dividend policy of

Classico Limited? Quote and explain relevant financial
indicators to support your answer.
Yes/No 
Indicator 
Figures 
Explanation 
Explanation for yes:
EPS was 130 cents and DPS was 110 cents.
(110/130 x 100) 85% of earnings given to shareholders, compared
to (75/94 x 100) 80% given in the previous financial year.
The dividends have increased from 75 cents to 110 cents
Explanation for no:
EPS was 130 cents and DPS was 110 cents.
(110/130 x 100) 85% of earnings given to shareholders, compared
to (75/94 x 100) 80% given in the previous financial year.
More is being paid out on dividends and less is being retained for
future expansion. 4

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Accounting 12 DBE/Feb.–Mar. 2015
NSC – Memorandum

4.7.3 Bongani wants to sell his shares in Classico Ltd and invest his
funds in an alternative investment. You disagree with him.
Quote and explain ONE relevant financial indicator, other than
dividends, to discourage him from selling his shares. Your
answer must include the actual figure/ratio/percentage.

ROSHE is 23,1%  see 4.1.5

Greater than the return on fixed deposits, 5,5%. 
Strong performance of the company may continue in the future to
offer greater returns to Bongani. 

OR

The value of his share has increased from R4,75 (475 cents) to
R9,50 (950 cents). (two marks)
This is a capital growth of 100% in just three years. His investment
in the company has increased from R152 000 (32 000 x R4,75) to
R304 000. Such high returns will not be earned on outside
investments. (two marks) 4

TOTAL
MARKS

75

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 Accounting 13 DBE/Feb.–Mar. 2015
NSC – Memorandum

QUESTION 5

5.1 PRINCESS BIN FACTORY

5.1.1 PRODUCTION COST STATEMENT FOR THE YEAR ENDED

28 FEBRUARY 2015

Raw/Direct material cost check operation 742 500 

Direct labour cost 452 000  + 114 000
566 000 
one part correct

Prime cost 1 308 500 

Factory overhead cost one part correct
326 800 
(256 270 + 75 030 (rent) – 4 500 )
Total manufacturing cost check operation 1 635 300 
Work in process (1 March 2013) 58 500 
1 693 800
Work in process (28 Feb 2014) check operation
(66 300) 
must be subtracted

Cost of production of finished goods 1 627 500  16

46 500 x R35

5.1.2 INCOME STATEMENT FOR THE YEAR ENDED 28 FEBRUARY 2015

Sales 2 180 000 

One part correct 
Cost of sales (2 180 000 + 60 000  ) x 100/160 
(1 400 000)
Gross profit check operation 780 000 
Operating expenses (213 800)
Selling and distribution cost (127 100 - 1 240 ) 125 860 
Administration costs (62 930 + 25 010) 87 940 
if 1/3 of rent above

Net profit for the year check operation (subtracted) 566 200  13

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 Accounting 14 DBE/Feb.–Mar. 2015
NSC – Memorandum

5.2 ROBS PENCILS

5.2.1 Comment on the fixed cost per unit. Note that fixed costs
increased from R236 800 in 2013 to R238 000 in 2014.

The fixed cost per unit decreased from R3,20 to R2,80. 

Economies of scale (more units were produced in 2014) 
2

5.2.2 Calculate the break-even point for the year ended 30 June 2014.

238 000 
14,50 – 11,75 

= 86 545,45 or 86 546 units  one part correct

4

Do you consider the level of production to be satisfactory or not?

Quote and explain figures to support your opinion.

Not satisfactory 
Explanation  quoting figures  (mark according to BEP calculation above)
Although the business produced more goods than last year,
(85 000 – 74 000), it failed to break even this year. (86 456 – 85 000)
Low profit last year / loss this year.
4

5.2.3 Identify ONE problem regarding the variable costs. Quote

appropriate figures to support your answer.

Cost identified  figures 

Raw materials costs increased from R4,00 to R5,50 per unit.

Provide TWO suggestions that Rob can use to address the

problem identified.

Any TWO suggestions:  

Possible answers:
• Monitor production techniques to minimise wastage
• Train workers
• Buy in bulk to take advantage of discount
• Look for local suppliers – reduce transport cost 6

TOTAL
MARKS

45

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Accounting 15 DBE/Feb.–Mar. 2015
NSC – Memorandum

QUESTION 6

6.1 Explain the importance of comparing budgeted figures with actual

figures achieved for the same period.
One valid explanation 

Deviations can be determined and remedial measures will be put in place

Establish whether the budgeting was realistic
To identify trends of mismanagement of cash 2

6.2 Calculate the missing amounts (indicated by a, b and c) in the Debtors'

Collection Schedule for the budgeted period March to May 2015.

a 6 048 
b 5 320 
c 15 750 
4

6.3 6.3.1 Calculate the budgeted total sales for March 2015.
10 500 x 100/20 = 52 500 
2

6.3.2 Calculate the amount budgeted for payments to creditors

during May 2015.
40 000
70 000  x 100/175  x 70%  = 28 000  any one part correct
or
12 000/30 x 70 = 28 000 4

6.3.3 Calculate the budgeted salaries of the shop assistants for April
2015.
102 000/12 = 8 500
8 500 x 3 = 25 500
15 300 x 9 = 137 700
25 500 + 137 700 = 163 200 any one part correct 3

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Accounting 16 DBE/Feb.–Mar. 2015
NSC – Memorandum

6.3.4 Calculate the % increase in the salary of the manager

expected in May 2015.
3 200 (1 mark)
(19 200 – 16 000) /16 000  = 20%  any one part correct
3

6.3.5 Calculate the amount of the additional loan expected to be

acquired on 1 April 2015.
875 x (100 x12) /14  = 75 000 any one part correct

6.4 An official of the local municipality has offered to recommend

Brakpan Stationers to supply stationery to the value of R500 000.
However, he will only do this if Vukile pays him R20 000 in cash.

Give Vukile advice in this regard. State TWO points.

Any two suggestions  

• This is actually a bribe which is unethical.

• If this information is made public, it will have a negative effect on
the business in the future.
• Vukile must tender formally to the municipality to secure the
contract through the normal processes.
4

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Accounting 17 DBE/Feb.–Mar. 2015
NSC – Memorandum

6.5 Identify THREE over-payments in April. Provide figures to support

your answer. Provide a valid reason for each over-payment to
support Vukile's decisions.

Over-payment with figures Valid reason

Item and figure      

1 The bonus of the manager in He has retained the services

February 2015 (R24 000) was of a valuable employee
not taken into account.
2 Purchase of vehicle The difference between motor
(R180 000) vehicle expenses and delivery
expenses is R5 200 per month
3 Cash purchase of Possibly to take advantage of
merchandise (R28 000) was bulk discounts on purchases
significantly higher than the
budgeted figure (R12 000)
6
Explain how this difference of opinion with his wife can be avoided
in future.

As they are jointly running the business they should have a specific
meeting to determine the budget jointly and Vukile should consult his
wife before spending on unbudgeted items. 
2
State TWO other strategies that Vukile and his wife could consider
in future to improve the results of the business.

Any two valid points:  

• Advertise monthly.
• Reduce number of shop assistants.
• Reinstate deliveries to customers.
• Negotiate longer credit terms with creditors. 2

TOTAL
MARKS

35
TOTAL: 300

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